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The Government's decision to cut £100 million in funding from students taking second degrees could "threaten the viability" of the universities hit hardest and bears the hallmarks of a decision made in haste, a committee of MPs has said.

A report from the Innovation, Universities, Science and Skills Committee says the Government's policy to stop funding ELQs - equivalent or lower qualifications than those a student already holds - could cause tuition fees for some students to rise by as much as 200 per cent. It says the decision was not based on evidence and should have been left until next year's wider review of student fees.

The Government argues that the decision it made in the autumn to cut ELQ funding will provide resources for 20,000 extra first-time students.

But the committee of MPs says it found "no convincing evidence" that ELQ students were impeding first-time undergraduates or that there was significant unmet demand from first-time undergraduates.

The Government should have carried out a full analysis of unmet demand before it diverted resources, the report says, and the Department for Innovation, Universities and Skills should have consulted the sector on the policy itself instead of on how it should be implemented.

It calls for the Commission for Employment and Skills to conduct a review of the policy's effects on ELQ students and on institutions.

Support for part-time students "remains precarious", the committee says, and the proposals are in danger of undermining what improvements there have been.

Phil Willis, the chairman of the committee, said: "We cannot see why the Government had to rush the changes out last September and start the withdrawal of funding from ELQ students in the academic year 2008-09. There is a major review of tuition fees due in 2009. It would have made more sense to have waited until then."

The committee recommends that the first annual review of exemptions from the policy be brought forward because the decisions are "inconsistent and unsuitable". For example, courses in Turkish studies are exempt but not those for pharmacists.

The report says that while "the main plank" of the Government's policy is to encourage employers to co-finance courses, the higher education sector "did not share the Government's belief" in this.

It also raises concerns that the plans could reduce flexibility in a system that currently allows people to acquire new skills to adapt to a changing economy.

The data used to calculate the changes in funding used by Hefce are historical and may result in institutions losing money to which they are entitled, the MPs say.

The Government urgently needs to produce guidance to institutions and students on the new rules, and it should make clear who bears the financial cost for an ELQ student who "unwittingly or by deception" obtains government support for fees.

Nearly all the 500 responses the committee received were "hostile" to the changes, the report says.